The Nov. 29 indictment alleges Ford obtained multiple advances by making false statements about his intended use of the bank funds. The indictment also alleges that Ford diverted bank funds toward personal use: for car loans, credit cards, other mortgages owed by ShoreBank, payments to a casino in Hammond, and his 2006 campaign for state rep.

[Tom Durkin] did not go into specifics of Ford’s defense, but contended federal prosecutors may be hinging their case on a mistake “on a financial form” submitted to the bank.

“These cases are usually about numbers put in a form and there are questions about whether banks relied on it or not,” Durkin said. “My point is that … when businesses and corporations submit loans, there is often a lot of mistakes made on numbers. And there are questions whether that was material the bank relied upon. I believe we are going to show that this bank was relying on his good character and his person.”

“I think there should be questions raised as why at this stage of the game these charges would be brought five to six years later,” Durkin told reporters after Ford’s arraignment at the Dirksen Federal Building.

“These are garden variety bank fraud charges that have nothing whatsoever to do with his public office,” Durkin added, expressing puzzlement that his client is the only person to be linked with the bank’s failure.

“I am not aware of any other prosecutions coming out of that bank,” Durkin said. “Why the only person that is prosecuted is a popular African-American legislator. I don’t understand it.”

There are a large number of people on both the West Side and in Oak Park — the communities he represents in Springfield — who are standing with Ford in these first days since his indictment. These are people we know and whose judgment we respect.

The charges against him do not relate to his six years in office. Unlike most of the political thugs who get indicted and convicted around here, no one is accusing him of selling out his office for profit. These charges tie back to Ford’s days as a Realtor and home rehabber and how he handled bank funds.

We respect his body of work as a legislator. And, we’d suggest, given the quiet emanating from Springfield, that his colleagues there are willing to be patient for a fair hearing of his case. This reaction is in marked contrast to the near instant demands that fellow West Side legislator Derrick Smith be expelled from the House almost immediately after his indictment.

“I think there should be questions raised as why at this stage of the game these charges would be brought five to six years later.”
I know! Totally right! He was able to avoid detection for a REAL long time. Just let him go. He’s really super great at his job. And he’s really nice. And handsome. And his constituents and co-workers love him. And he drives a normal car not a flashy car. Let him go. Let him go and apologize.

Is the argument that if you’re a good public official, it’s ok if you commit garden variety bank fraud?

More seriously, it looks ilke the Obama Administration made a conscious decision in 2009 not to prosecute top officials of the big financial companies because they believed correctly or incorrectly that it would bring down the financial system.

Was that decision wrong and should many more of the weasels who ran the banks have been prosecuted? In my view, yes.

Does that mean that Ford should get a pass IF he committed bank fraud? Prosecution decisions are never entirely fair. All criminals aren’t caught. Prosecuting some folks who are in the public eye has some deterrent value.

There are a lot of sometimes conflicting judgments involved in making prosecution decisions. Until we see the evidence of what Ford actually did, it’s too soon to have an opinion on whether the U.S. Attorney’s Office made the right call here.

We have to wait and see where this goes. I am especially interested in potential witnesses.

I really don’t know, but my gut tells me that bank lending officers and senior executives, who could be under Federal indictment for their own actions leading to the ShoreBank failure, are throwing their customers under the bus — and the Feds just selected a newsworthy one.

Perhaps this is the first of a number of prosecutions of people believed to have defrauded ShoreBank. The ongoing post mortems of the banking collapse point to a substantial number of people borrowing money from banks for one stated purpose, using the proceeds for another and defaulting on the loans. Even if all the money was used as intended, Mr. Ford appears to have the means to be paying his loan back from other resources. If this is the case, all borrowers with the means to work on repaying their loans should be running around creating repayment plans.

The other case is that he has ticked off someone who is connected and is being squeezed for that purpose, but that could not happen in Chicago - could it.

“These cases are usually about numbers put in a form and there are questions about whether banks relied on it or not,” Durkin said. “My point is that … when businesses and corporations submit loans, there is often a lot of mistakes made on numbers. And there are questions whether that was material the bank relied upon.”

Back in those days, banks and mortgage brokers were combing real estate records to make cold-call and direct mail appeals for refinancing.

They were going for volume; they wanted to originate as many loans as possible, collect the origination fees and then sell them off to the Wise Men security bundlers.

I refinanced my mortgage once, and the loan officer begged me to add $50,000 to the estimated value of my home and take a portion of it in equity. I never wanted to take out any equity; just a lower rate.

When I closed, the bank sent some 21-year-old over to my house, at night, to sign the documents. I’d left my wallet at work and had no ID. She let me use my public swimming pool pass as ID to refinance.

I wasn’t attempting to defraud anyone, but you know what? The banks sure would have loved for me to put down all sorts of BS on the forms to make the loan.

They weren’t going to hold the paper, anyway, and as long as values continued to climb, who cared.

There are a couple of things at play here. First, Ford is pretty popular among his fellow legislators and among activists on the West Side. Sometimes, being a nice guy buys you the benefit of doubt.

Second, there seems to be some legitimate questions about selective prosecution. Ford’s defense attorney did not articulate it well, but c’mon, there’s no doubt ShoreBank floated hundreds and maybe thousands of loosey-goosey loans like the one they gave Ford. In the easy-money/easy-credit days before 2008 they gave loans to anyone who could see over the counter at their branch office. And plenty of developers, real estate brokers, and rehab guys submitted paperwork with inflated reports of self-worth and pumped up appraisals… yet Ford is the only ShoreBank lendee to get indicted? Not to mention, as Carol Marin pointed out in a recent column, there is a long line of Wall Street bankers and brokers who did exactly what Ford is accused of doing, only on a much grander scale (billions instead of thousands of dollars in fraud,) but none of them are heading to prison.

Don’t get me wrong, if Ford broke the law or filed deceptive paperwork he has to pay the price. (Why not go after him and others in civil court to make them repay federally backed loans that defaulted?) It’s just that the federal law enforcement has earned our cynicism when it comes to how they’ve policed financial misconduct the last few years.

As someone who is familiar with LaShawn and works in bank fraud, these charges are being brought only because as a legislator he had a target on his back because it makes good press for the US Attorney’s office. If he were not a public figure, this would have never happened. The only action that may have been taken would have been the Bank may have pursued him civilly for willful misrepresentation - only if he did not pay them back.

My guess would be that the reason this came up now is the Feds realized he is a politically exposed person and looked back to see if there was any suspicious activity reports filed by Shorebank on LaShawn in the past, or looked closer into his files as they too are political.

My guess would be he filed amended tax returns after obtaining the line of credit, did not update the bank, and got careless handling personal and business funds. It sounds like he paid the Bank back. There is far more substantial bank fraud reported daily the US Attorney’s office should be pursuing - but instead they waste time, resources, and money on this. Regardless of the outcome, his career as a real estate investor will be impacted as he will have a hard time ever obtaining a loan again.

As a follow up to the Anon comment above, “These cases are usually about numbers put in a form and there are questions about whether banks relied on it or not,” Durkin said. “My point is that … when businesses and corporations submit loans, there is often a lot of mistakes made on numbers. And there are questions whether that was material the bank relied upon.”

If ShoreBank’s loan proposal for this line of credit contains representations LaShawn was well known, trusted, and had a strong banking history with senior management - I see it being extremely difficult to prove any misrepresentation made on a form was material the bank relied upon when the loan committee approved the loan.

Indicting Ford is going to discourage business people from running for public office. A reasonable person is not going to want to go through life with a target on their back. Do we really want a legislature without people who have had to make payroll, done a business deal, built a business from scratch, etc?

There is also a certain unfairness to it. What happened to the people who ran the patronage/contribution scheme that Mary Lee Leahy successfully fought all the way to the U.S. Supreme Court? Today high ranking members of then Gov. Thompson’s administration from 1883 are Federal judges (two of them…including the one who oversaw the Blago and Cellini trials) and the retired head of one of Chicago’s largest law firms (Thompson himself).